Future Of Suning At Inter Milan Still Uncertain As Oaktree Loan Due Date Looms

The future of Suning at Inter Milan is as uncertain as ever with the due date for their loan from Oaktree capital just four days away.

This according to today’s print edition of Rome-based newspaper Corriere dello Sport, via FCInterNews.

By now, the situation regarding Suning’s future at Inter is not a secret.

The Nerazzurri owners face a crossroads, with May the decisive months for them to either stay on or be forced out.

The €275 million payment in kind loan that Suning took on from US-based fund Oaktree nearly three years ago comes due then.

With interest (there has been a 12% annual interest rate), the Inter owners will owe Oaktree nearly €400 million.

There’s no doubt that Suning will not be able to pay Oaktree back in full.

So there are three options. One is for Suning to sell Inter before then – increasingly unlikely as the days and weeks pass. Another would be to refinance the loan – Suning’s preference.

And then, if Suning do not do either of those two things in the next four months, control of Inter would pass into the hands of Oaktree.

A recent report revealed that Oaktree would have to reimburse Suning in the event that they take control of the Nerazzurri.

The amount would likely be between €150 million and 300 million.

If the loan does come due and the owners default, Suning will lose control of Inter, but not without at least some measure of financial compensation per the terms of the loan.

Future Of Suning At Inter Still Uncertain With Oaktree Due Date Four Months Away

With the due date now closer than ever, developments will have to come within a relatively short timeframe.

But according to the Corriere, that does not mean that any decisive moments have arrived yet.

The situation still appears to be that Suning are trying to refinance. But they have not found any solutions in the regard yet.

There are obstacles to finding a new partner to refinance with.

These include high interest rates as well as the increasing time crunch.

As far as a sale, the Corriere note that the book value of Inter would be essentially negative. This is because of the significant net losses that any future buyer would have to cover.

But of course, Inter’s value as an asset is in reality much higher than that.

The Corriere note that in the event of a sale, Suning would likely use the figures involved in similar sales in the recent past as a benchmark.

The sale of city rivals AC Milan from Elliott Management to RedBird Capital serves almost perfectly in this respect.

The price that RedBird eventually paid to acquire the Rossoneri was around €1.2 billion. So this would likely be a ballpark figure at which Suning would aim to sell Inter.

This is still all relatively hypothetical, reports the Corriere.

But it cannot stay that way for much longer. The due date for the Oaktree loan is now right on the horizon.